The Impact of Expiring Health Care Subsidies on Americans

Thu Dec 11 2025 19:07:52 GMT+0200 (Eastern European Standard Time)

As the U.S. Senate prepares for crucial votes on rival health bills, millions of Americans face the possibility of soaring health insurance costs due to expiring COVID-era subsidies. Both sides of the aisle present contrasting proposals amid rising political stakes for the upcoming midterms.

With just weeks until crucial Affordable Care Act subsidies expire, millions of Americans may face substantial increases in their health insurance premiums. Democrats advocate for extending the enhanced subsidies, while Republicans suggest alternatives including health savings accounts. The political ramifications of these decisions loom large for the upcoming midterms.

The Affordable Care Act subsidies brought down costs

More than 24 million people have Affordable Care Act health insurance, including farmers, ranchers, and small business owners without health options through their work. Enrollees making under 400% of the federal poverty level qualify for permanent subsidies. These were enhanced in 2021, but are set to expire on January 1.

Without an extension of the subsidies, health care costs will rise for millions

If tax credits lapse, average annual premium payments for subsidized enrollees are expected to soar by 114%, rising from $888 in 2025 to $1,904 in 2026. A significant portion of the population, mainly young and healthy enrollees, may opt to drop coverage rather than face inflated fees.

Democrats back an extension, while Republicans propose health savings accounts

Senate Democrats propose maintaining subsidies for an additional three years, potentially saving Americans money and keeping many insured. In contrast, Republicans push for health savings accounts funded for two years instead of subsidies, requiring lower-cost insurance purchase, raising concerns about affordability for low-income individuals.

The political stakes are only growing

The Senate votes come amid rising pressures surrounding the midterms, highlighting health care costs as a key issue. Democrats are likely to emphasize the negative impact of not extending subsidies, while Republicans face internal divisions on how to address the expiring aid.